Brand Extension Essay

Brand extension is a marketing strategy according to which a company marketing a fruit or a service launches a fresh offering (product or service) that is related to the one of the existing carrys of the company, but offers different benefits and/or targets a different segment. Organizations do this strategy to increase and supplement upon their brand equity. When a firm is introducing a new product, it has the following 3 choices on branding 1. Developing a new brand for the new product2. Using the existing brand for the new product3. Combining the new brand and the existing brandThe use of second and 3rd strategy is referred to as brand extension. Brands may be classified as one of the following Parent Brand If an existing brand gives kin to a brand extension, it is referred to as produce brand. Sub Brand When a new brand is combined with an existing brand, it is called as sub brand. Family Brand If a parent brand has links with multiple brands through brand extensions then i t is called as family brand.Brand Extension DimensionsThere are a large consider of ways in which brand extension can be accomplished. One of the vital differences is if the extension is in the same or different menage of the product. frankincense they can be classified as upright or horizontal extensions.Vertical extensionsVertical extensions refer to the introduction of a related brand in the same product category but having a different price and quality balance. Vertical extensions offer the firm a quickest way to leverage upon the core products equity. As an extension strategy, vertical extension is widely practiced in many industries. For example, within automobile industry, the various brand models attempt to offer different price-quality bundles to attract various market segments. Often a product is extended in an attempt to just gain more(prenominal) of the market share.Vertical extension directionNew product introductions using vertical extensions can extend in 2 directi ons, upscale and downscale vertical extensions. The vertical brand extension is that type of new product introduction that seems to be carrying less risk and seemingly having more appeal to management. The new product which is being introduced is in the same category as the parent product aims at a same market segment as the parent, and may or may not enjoy the same acceptance as the parent.Upscale vertical extensionsUpscale extensions involve a new product introduction by the firm with higher price & quality characteristics than the original product. downmarket vertical extensionsIt involves a new product introduction with lower price & quality characteristics than the original. Downscale vertical extensions may target sampling to a new segment, and bring some gain in market share.Horizontal extensionsGenerally, horizontal brand extensions every use or extend an existing products name to a new product in the same product category or to a product category new to the organization. Th ere are 2 types of horizontal extensions which differ in terms of their focus area. They are termed as derivation extensions and category extensions.Line ExtensionsAll the customers differ in terms of their usage needs. The brand has to fill the market with variety of products as per the needs of the segments. If a parent brand is used to brand a new product that targets a new segment in the market within the same product category that was previously served by the parent brand, it is called as line extension. Line extension leads to the addition of a new and distinct flavour or ingredient to the category. It sometimes might also lead to a new application for the brand or an introduction of a different form or size. For example, Bisleri is the pioneering brand in category of mineral water. Originally, Bisleri started off with 1 ltr bottle. But recently, the brand has launched bottles of different sizes and quantities.